Should I invest in a home warranty?
When I go into peoples homes I run into a lot of questions in regard to home warranties. Are they good? Well lets look at what home warranties do and then you can decide.
Home warranties protect your home like an extended warranty. While there are some people that do benefit from these home warranties it should be noted why there is such a push for extended warranties in regards to electronics (which in include heating,air conditioning and appliances) cars and homes. Well let's face it, why does any business do anything. To make money.
I don't know if you've ever experienced a sales person anywhere (a lot when purchasing a car) that has to tell you 3 times about the extended warranty, but I have. They are trained to do that to increase profits. That's fine and they should be free to do that but, is it really in your best interests?
Let's look at some experiences I've had with extended warranties. Toyota is the best example I have in my experience. I bought an extended warranty on a 05 pickup used in our fleet. When I noticed the carrier bearing going out naturally I took it in to have it repaired. I start noticing they were looking for ways to blame me for misuse of the vehicle. They searched for any add ons and the like. Well I did add some air bags to assist in pulling trailers because I discovered the truck really wouldn't support the tongue weight given to me at the time of purchase. It would bottom out. The service person began to tell me that you can't do that and how it showed that I was abusing the truck. After some confrontational conversation they finally agree to pay for it but the service person said something that stuck with me. It still cost less than the payment I had made on the warranty. Clearly she was focused on her companies profits. It was as if when I purchased the warranty Toyota was now part owner and could dictate what I could and could not put on the vehicle and I think that's right. They are!
Next lets look at a warranty on a home. I've never purchased a home warranty but I know a lot of people that have. One case in point was a person that I went to church with. She was single and thought it would help out with the repairs on her home. I was working for this home warranty company at the time and was called to work on her house. She had had the warranty 17 years and was touting the benefits of a warranty because they were going to install her a new condenser. She paid $375.00 dollars a year for the contract and $50.00 dollars every time a contractor came to her home. She proudly proclaimed that they are installing a new condenser at a very cheap price. Well I hated to burst her bubble but some simple math showed that it was an extremely expensive condenser. $375.00*17=$6375.00 dollars and that's not counting the additional "50.00 deductible". I had to inform her I could have replaced the complete (inside and out) for half of that. She did point out she had had other repairs but she was definitely not making out as she had thought. She had wasted a couple of thousand dollars.
Plus there is the fact she had no options as to what was put in. She got the cheapest condenser they could find and there was very little if any cost savings on her electric bill (which also lessened her savings) and she could not take advantage of any government rebates. It seems as though to me that if you like to be treated like your living in an apartment (renting) they are a good way to go because again they are part owner and get a say in what you do and do not purchase.
I think the motivation behind the purchase of a home warranty contract is so you don't have to see the big bill all at once. The condenser in the above mentioned example would have cost the home owner approximately $1000.00 dollars at the time but instead of taking responsibility to save and be ready for the problems you will encounter when you purchase a home they want to defer that responsibility to some one else. They are happy to do so, they take your money invest it and reap big profits. Why not do that yourself, even at the bank you'll make some profit but, instead she's lost several thousand dollars over the years. Even after the repairs she would have had a couple of thousand in savings.
Now I know these warranty companies are shrewd business promoters and give enough money away to have people talking but, if you check on the internet you'll find a lot of people not satisfied with what they've gotten. I know my company had problems getting paid on time so when a home owner called they would have to wait until they brought their account up to date, and it was hot at that time too. Also these companies have ways of not approving payment for one reason or another (i.e. lack of maintenance, abuse). If your going to purchase a home warranty I strongly suggest you do your home work and read the fine print or you may find yourself with something you didn't expect. They do pay but their value is questionable.
All that being said it's up to you. If you want to be treated as part owner in your home, by all means purchase a home warranty. I for one will never buy another extended warranty, I want the money.
Home warranties protect your home like an extended warranty. While there are some people that do benefit from these home warranties it should be noted why there is such a push for extended warranties in regards to electronics (which in include heating,air conditioning and appliances) cars and homes. Well let's face it, why does any business do anything. To make money.
I don't know if you've ever experienced a sales person anywhere (a lot when purchasing a car) that has to tell you 3 times about the extended warranty, but I have. They are trained to do that to increase profits. That's fine and they should be free to do that but, is it really in your best interests?
Let's look at some experiences I've had with extended warranties. Toyota is the best example I have in my experience. I bought an extended warranty on a 05 pickup used in our fleet. When I noticed the carrier bearing going out naturally I took it in to have it repaired. I start noticing they were looking for ways to blame me for misuse of the vehicle. They searched for any add ons and the like. Well I did add some air bags to assist in pulling trailers because I discovered the truck really wouldn't support the tongue weight given to me at the time of purchase. It would bottom out. The service person began to tell me that you can't do that and how it showed that I was abusing the truck. After some confrontational conversation they finally agree to pay for it but the service person said something that stuck with me. It still cost less than the payment I had made on the warranty. Clearly she was focused on her companies profits. It was as if when I purchased the warranty Toyota was now part owner and could dictate what I could and could not put on the vehicle and I think that's right. They are!
Next lets look at a warranty on a home. I've never purchased a home warranty but I know a lot of people that have. One case in point was a person that I went to church with. She was single and thought it would help out with the repairs on her home. I was working for this home warranty company at the time and was called to work on her house. She had had the warranty 17 years and was touting the benefits of a warranty because they were going to install her a new condenser. She paid $375.00 dollars a year for the contract and $50.00 dollars every time a contractor came to her home. She proudly proclaimed that they are installing a new condenser at a very cheap price. Well I hated to burst her bubble but some simple math showed that it was an extremely expensive condenser. $375.00*17=$6375.00 dollars and that's not counting the additional "50.00 deductible". I had to inform her I could have replaced the complete (inside and out) for half of that. She did point out she had had other repairs but she was definitely not making out as she had thought. She had wasted a couple of thousand dollars.
Plus there is the fact she had no options as to what was put in. She got the cheapest condenser they could find and there was very little if any cost savings on her electric bill (which also lessened her savings) and she could not take advantage of any government rebates. It seems as though to me that if you like to be treated like your living in an apartment (renting) they are a good way to go because again they are part owner and get a say in what you do and do not purchase.
I think the motivation behind the purchase of a home warranty contract is so you don't have to see the big bill all at once. The condenser in the above mentioned example would have cost the home owner approximately $1000.00 dollars at the time but instead of taking responsibility to save and be ready for the problems you will encounter when you purchase a home they want to defer that responsibility to some one else. They are happy to do so, they take your money invest it and reap big profits. Why not do that yourself, even at the bank you'll make some profit but, instead she's lost several thousand dollars over the years. Even after the repairs she would have had a couple of thousand in savings.
Now I know these warranty companies are shrewd business promoters and give enough money away to have people talking but, if you check on the internet you'll find a lot of people not satisfied with what they've gotten. I know my company had problems getting paid on time so when a home owner called they would have to wait until they brought their account up to date, and it was hot at that time too. Also these companies have ways of not approving payment for one reason or another (i.e. lack of maintenance, abuse). If your going to purchase a home warranty I strongly suggest you do your home work and read the fine print or you may find yourself with something you didn't expect. They do pay but their value is questionable.
All that being said it's up to you. If you want to be treated as part owner in your home, by all means purchase a home warranty. I for one will never buy another extended warranty, I want the money.